How I convinced senior management to start optimising
- 17 January 2017
- 227 views
Is your company currently not employing conversion rate optimisation (CRO)? Do you advocate its uses to your team but face pushback?
It is common.
There are plenty of articles on how to convince your boss to undertake optimisation activities like this, this and this. But having done it myself a number of times with different businesses, I wanted to take a step back from these other articles and explain how I have done it, successfully, before.
This approach depends completely on the seniority level of your boss, the nuances behind their personality and their overall understanding of CRO.
There are only two ways to get sales
I generally start this conversation by asking what the company’s objectives are to increasing sales.
And how are you going to achieve that?
I start by explaining that there are only two ways to get sales (disclaimer, I have received pushback from this and rightly so – but generalising, it is true). The first is to increase your traffic – SEO, PPC, Content Marketing and Social – and by playing a simple game of more traffic equates to generating more sales. This is the route which most of the senior management team are used to following because, well, we have been conditioned to think that way. If I had a market stall, my approach is to simply persuade people to come and buy through attracting them, generating awareness, and so forth. It is an old, but still successful and required, form of marketing.
The second is to increase your conversions. In other words, of those people that come to your market stall, convince them to purchase from you. This is CRO – optimising the approach, experience and journey a user takes (and believe me, it is complicated and never strictly defined) to persuade them to purchase more.
This is surely more an efficient use of marketing budget?
Let me explain why.
If your conversion rate is two per cent, but 98% of users are not converting, we must ask why? This is a scary figure, I'll admit. If you sent an extra 100 people to your site through increasing traffic, only two of those will convert.
This is even scarier when you consider you are paying for that traffic. Do you know how much you are paying for those extra 100 visitors and, indeed, the respective conversion rate of that specific traffic? This now becomes much more a question of ‘what is your cost per acquisition’, of which only CRO can directly impact (arguably the quality of traffic can affect it, too).
But wait, there is a solution.
It is CRO. It is you. You are a digital marketer championing and advocating CRO, so do what you do best and quantify your recommendation.
Add a conservative figure to your conversion rate. What would, say, a 10% increase in your conversion rate bring on an annual basis?
If your average order value is £100 and you get 250,000 sessions per month at a conversion rate of 1.5%, assume this has generated £375,000 revenue per month.
Your new conversion rate would be 1.65%, meaning an extra uplift in monthly revenue of £37,500 and, therefore, an annual increase of £450,000.
You can use this calculator from Moz if it helps.
We could compare the use or efficiency of converting traffic against acquiring traffic and analysing figures, such as:
- Between 2013 and 2014, in the space of 12 months, the number of Google Algorithm changes stood at 890.
- The cost of PPC ads is said to increase by five percent to 12% a year due to increased competition. $55 billion was spent on paid search in 2014, and that number rose to more than $71 billion by 2016.
- Acquiring customers is said to be seven times more expensive than retention.
- Conversion rate optimisation is about converting your users. It is not subject to third-party algorithm changes like Google. It (arguably) stands the test of time.
This is why we talk about the process being nothing but an efficient use of your marketing spend.
If that doesn’t work, we create desire through social proof. What are others doing? Well, did you know that 85% of search marketing professionals will focus more on conversion rate optimisation this year?
What about your competitors? Are they optimising? This can sometimes be the tipping point. You can use tools to identify whether your competitors are A/B testing or not. If they are optimising, then they are making a concerted effort to increase their CRO, which should, in turn, spur you to do the same – at the very least.
A word of warning
CRO can sound too good to be true. Expectations can often be sky high. It is important to manage this and talk, genuinely, about what optimisation can bring. We have a whole company handbook dedicated to this at User Conversion for new clients, which outlines what to expect with us. It is important to be realistic about your achievements, and explain that testing and optimisation is an art – and, like any good pieces of art, it takes time. This is a blog post in itself, but think about things like:
- how to reach statistical significance within an experiment, and the length of time a test should run for; and
- how experimental data may not reflect real-life data. For example, a 40% uplift in a test doesn’t necessarily mean a 40% improvement on your bottom line.
Convincing senior management to undertake in a new and often misunderstood practice is difficult. We recommend a strict education process to understand the benefits of CRO, quantifying the potential uplift, and demonstrating both marginal and substantial gain. From here, of course, it is about implementing a strategy that works, and demonstrating ROI through a proof of concept where possible. Again, this is an entire blog post in itself, however luckily there is a lot of information on the internet around this subject.
If you'd like hear more from David Mannheim, then sign up to our two-day Advanced Conversion Rate Optimisation course, where you'll learn how to convince your boss to optimise and what it could mean for your company.Back to all
- 227 views